Second action allowed to proceed where earlier action struck out for breach of unless order

In a recent decision, the High Court has considered the proper approach to be taken in a second action where a previous action bringing the same claim has been struck out for failure to comply with an unless order: Davies v Carillion Energy Services Ltd [2017] EWHC 3206 (QB).

In summary, where the first action was struck out as an abuse of process, or the conduct of the first action was otherwise inexcusable, the second action will be struck out as an abuse save in "very unusual circumstances". Where the first action was struck out for a single failure to comply with an unless order, the claimant will not necessarily be debarred from pursuing a second action, even if the claimant failed to apply for relief from sanctions in the first action - though that may be relevant in considering whether the conduct of the first action was inexcusable.

Each case will turn on its facts. In this case, the court's decision appears to have been influenced by some doubt regarding the basis on which the first action was struck out and the fact that the claimant was a litigant in person. Although the court accepted that being a litigant in person did not excuse failures to comply with the CPR or court orders, it was appropriate to make some allowance for lack of familiarity with the detailed rules, in this case relating to pleading.

Background

The second defendant (referred to below as the Defendant) installed a central heating boiler and other equipment at the claimant's property. The boiler ceased to function, having frozen. The claimant brought proceedings against the Defendant in the County Court for £19,482. The claimant was not legally represented and the claim form was completed in manuscript. The Defendant filed a defence which, as well as putting forward a substantive defence relating to the cause of the malfunction, contended that the claimant had failed to set out any allegations in support of his claim or any breakdown of the sums claimed.

The deputy district judge made an unless order, of his own motion, that unless by a particular date the claimant serve a fully pleaded particulars of claim including specifying how the £19,482 was made up, the claim would be struck out. The order further provided that, upon the claimant complying with the order, the Defendant had permission to file and serve an amended defence.

In purported compliance with that order, the claimant filed and served particulars of claim, in a handwritten document comprising 12 paragraphs over 4 pages. The Defendant then filed and served its amended defence. The Defendant did not seek to allege that the claimant had not complied with the unless order.

However, when the matter came on for trial, the deputy district judge set to try the case made an order of his own motion that unless by a particular date the claimant filed and served: (1) "a fully pleaded particulars of claim specifying on what legal basis the claim is made and upon what basis the sum of £19,482 is made up", the claim would be struck out; and (2) his witness evidence, he would be debarred from giving evidence at trial. Further directions were made for re-listing the trial.

On the specified deadline, the claimant filed and served a 39 page manuscript document headed "Witness Statement of Philip Davies" in purported compliance with the order. The action was subsequently struck out on the basis that the claimant had not complied with the requirement at (1) above. The claimant then instructed solicitors who indicated that they had been instructed to apply for relief from sanctions, but in fact no application was made and there was no appeal from the unless order.

The claimant later issued a new claim against the Defendant, as well as the first defendant (Carillion). The Defendant applied to strike out the second action on several grounds, including that it was abuse of process. The district judge declined to strike out the action. The Defendant appealed to the High Court on the abuse of process ground.

Decision

The High Court (Morris J) dismissed the appeal. The court noted that the approach to be taken by the court in a second action where a first action has been struck out for failure to comply with an unless order was not entirely clear on the authorities.

After reviewing the relevant lines of authority, Morris J concluded that where a first action has been struck out for procedural failure, the court should apply the following approach:

• Where the first action was struck out as itself being an abuse of process (ie for intentional and contumelious conduct, or want of prosecution, or wholesale disregard of rules of court) the second action will be struck out as an abuse unless there is "special reason".
• Where the first action was struck out in circumstances which cannot be characterised as an abuse of process, the second action may be struck out as an abuse if the conduct in the first action was "inexcusable".

In light of developments in the court's approach to dealing with procedural failures as per the Mitchell and Denton decisions (considered here), if the conduct of the first action was an abuse of process or otherwise inexcusable, the court will apply a strict approach. In those circumstances, the second action will be struck out as an abuse save in "very unusual circumstances". Further, the question of whether the conduct in the first action was "inexcusable" might fall to be assessed more rigorously and in the defendant's favour. However, Morris J commented that "even post-Jackson, ultimately, the importance of the efficient use of resources does not ... trump the overriding need to do justice".

(In a case where a first action in respect of the same matters was struck out on procedural grounds, the court should not apply the balancing approach in Aldi Stores v WSP Group [2007] EWCA Civ 1260. That approach applies where a party seeks to raise in a second action issues or facts which could and should have been, but were not, raised in a first action.)

Applying the above approach to the facts of the case, the judge rejected the Defendant's submission that the claimant's conduct of the first action was an abuse of process. There was not a wholesale disregard of the rules. The claimant had sought to comply with the rules. Although being a litigant in person is not a good reason for failing to comply with the CPR or court orders, some allowance should be made for the likelihood that the claimant would not be fully conversant with the details of pleading rules. The claimant's failure to comply was understandable and not inexcusable.

It was not clear whether the failure to apply in the first action for relief from sanctions was a factor in considering whether the claimant's conduct in the first action was an abuse of process or otherwise inexcusable, or whether it fell for consideration at the stage of "very unusual circumstances". The judge considered that it should be the latter, since the questions of "abuse of process" and "inexcusable" concerned the circumstances leading to the first action being struck out. In that event, a failure to apply for relief would militate strongly against the court finding "very unusual circumstances". However, as the judge had found that the claimant's conduct was neither an abuse of process nor inexcusable, he did not go on to consider whether there were "very unusual circumstances".

He did however consider the position if the failure to apply for relief had to be considered as part of the question of whether the conduct of the first action was an abuse of process or otherwise inexcusable. The judge commented that in many, if not most, cases a failure to apply for relief following breach of an unless order would be a strong factor in concluding that the conduct in the first action was inexcusable. But in the present case, the failure did not lead to that conclusion. The claimant's evidence was that, at the time he could have applied for relief, he had no further funds to maintain his legal representation nor the emotional fortitude to advance the fight at that stage.